Multilevel halftoning (multitoning) is an extension of bitonal halftoning, in which the appearance of intermediate tones is created by the spatial modulation of more than two tones, i.e., black, white, and one or more shades of gray. In this paper, the conventional multitoning approach and a previously proposed approach, both using stochastic screen dithering, are investigated. A human visual model is employed to measure the perceived halftone error for both algorithms. The performance of each algorithm at gray levels near the printer’s intermediate output levels is compared. Based on this study, a new overmodulation algorithm is proposed. The multitone output is mean preserving with respect to the input and the new algorithm requires little additional computation. It will be shown that, with this simple overmodulation scheme, we will be able to manipulate the dot patterns around the intermediate output levels to achieve desired halftone patterns. Implementation issues related to optimal output level selection and inkjet-printing simulation for this new scheme will also be reported.